If It’s November in New Jersey, and You’re Online, You May Be Gambling!

On November 26, 2013, New Jersey residents and visitors will be able to play poker and an array of other casino games online. As we’ve reported before, the New Jersey legislature passed the New Jersey Internet Gaming Act in March 2013. Among its key provisions are:

1. Any game already approved for land-based play may be offered online by casinos licensed by the New Jersey Department of Gaming Enforcement (“NJDGE”). This includes a wide range of games, including numerous forms of poker, blackjack, craps, roulette, and slots.

2. Licenses are limited to the 12 New Jersey land-based casinos – all of whom are located in Atlantic City. Current permit holders are listed on the NJDGE website.

3. These casinos are allowed to affiliate with online partners (most but not all have at this point done), known as “internet gaming intermediaries,” and themselves licensed by NJDGE. The NJDGE will list these intermediaries on its website. Among the online casinos expected to lunch by November 26th are the Borgata (partnered with bwin.party), the Tropicana (partnered with Gamesys, which runs jackpotjoy.com), and the Golden Nugget (partnered with Bally). The Trump Plaza and Taj Mahal have partnered with Befair.

4. While the New Jersey regulations require age verification and geo-location requirements, no technical standards accompany those requirements. Likewise, age verification is required (the minimum age being 21), but there is no particular guidance as to how stringent that must be, or what age verification standards or solutions might or might not suffice.

5. NJDGE regulations are more completely described in FAQs, here: http://www.nj.gov/oag/ge/internetgaming_faqs.html. The regulations along with the Division’s further guidance covers a number of topics ranging from location of servers, maintenance and accessibility of self-exclusion lists, privacy and security, anti-money laundering procedures including permitted withdrawal methods, and required user disclosures and disclaimers.

Issues for Advertisers

Even with play confined to New Jersey, significant advertising efforts are afoot – both in New Jersey and cross-border. The New Jersey law does not impose restrictions on promotions or advertising, except that advertisements must not be “deceptive.” However, given the likelihood that there will be at least some consumer confusion as to cross-border restrictions, advertisers should consider how to make clear and effective disclaimers and requirements.

Open Issues

Notwithstanding the robust notice and comment process, and the Division’s thoughtful treatment of many concerns raised, a number of potential issues may continue to evolve. One concern raised during the comment period is that geolocation solutions may rely simply on IP address, which can be fairly inexact, particularly in densely populated areas such as New Jersey, (One commenter, LaserLock, suggested “that the rules are inadequate because the only geo-location method required for checking a patron’s physical location is through IP address verification.”) If significant numbers of players in New York or Philadelphia are not blocked from gambling, it could lead to regulatory disputes or civil complaints. (Likewise, were that to occur, UIGEA concerns could arise, and UIGEA exemptions become inapplicable.) This week, XYVerify, a mobile geo-location services provider, announced license approval from NJDGE, but it appears confined to mobile rather than web-based products.

The treatment of free games may also continue to evolve, as the Division has issued temporary rules regarding their offer. For instance, currently, the regulations prohibit offering free games with an “award” to players under 21, and require the games to be “substantially similar” to games offered for play. Further rules and guidance may emerge regarding this, as well as regarding games offered over social media. Likewise, the offering of games for “virtual currency” is not addressed, and may be an issue requiring the Division’s further guidance.

All of this means that 2014 is likely to be an exciting year (at least, for those of us in New Jersey) for new online gaming products, and potentially interesting legal issues around cross-platform and cross-border gaming, advertising, and regulation.

About The Author

Ken counsels clients on complex issues involving information privacy and data law, online liability, consumer regulatory and gaming law, including regulatory response, and adherence to self-regulatory guidelines for online advertising. Ken has had more than twenty years of experience in high-profile regulatory, in-house and private practice roles, including as Chief of the New York Attorney General’s Internet Bureau. He is one of the nation’s leading authorities on the relationship between emerging advertising technologies and online privacy.